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Google Ads Conversion Value Rules, Explained

September 1, 2023

Google created conversion value rules to give advertisers more control over their ad spend. Essentially, they allow advertisers to tell Google what conversion factors result in the highest value. Conversion value rules enable strategic management to combine advertiser expertise with automation to get the best ROAS possible. 

What are Conversion Value Rules?

Conversion value rules allow users to modify the value of conversions based on the category of the conversion action and the following three impression dimensions

  • Audience membership
  • The physical location or location of interest
  • Device

Advertisers can use the Google Ads API to define conversion value rules, combine them into a conversion value rule set, and apply the rule set to either your whole Google Ads account or to your chosen campaign. The Google Ads API report presents a segmented breakdown of your conversion values' original, unadjusted, and adjusted portions. 

Conversion value rules are comprised of two elements:

  • Conditions that determine when they are applied
  • The action is taken once they are applied

They are used in real-time to optimize target ROAS and maximize conversion value, utilizing smart bidding. Remember that smart shopping campaigns don’t support tCPA and max conversions.

Conversion value rule conditions

Conversion value rule conditions can be defined in a few fields:

Audience_condition

The audience_condition field applies the rule to impressions associated with a particular audience, which can be Google or first-party audiences. You can further specify resource names using the user_lists or user_interests fields. To retrieve the resource names of all available user lists or user interests, issue a search stream or request of GoogleAdsService where the FROM clause of the query is user_list or user_interest.

Audience_conditions containing multiple user lists and user interests will match impressions with any associated user lists or interests. 

Device_condition

Device_condiiton applies to impressions that match specified device_types from the following list: 

  • UNSPECIFIED: Not specified
  • UNKNOWN: Used for return value only. Represents value unknown in this version
  • MOBILE: Mobile device
  • DESKTOP: Desktop device
  • TABLET: Tablet device

Geo_location_condition

This applies to impressions that meet predefined location criteria. 

Limitations

Each conversion value rule can have two conditions. Rules with no conditions apply to impressions that don’t meet the conditions of another rule in the set.

Conversion values created at the campaign level will not impact bidding performance or reported conversions for other campaigns. 

  • Account-level campaign values rules: apply to Search, Display, and Shopping
  • Campaign-level value rules: apply to Search, Display, Shopping, Smart Shopping, and Pmax for retail
  • D&E test with value rules: apply to Search and Display only

Benefits of Using the New Conversion Value Rules in Google Ads

Using Conversion Value Rules is a no-brainer if you want to improve your Smart Bidding results. Conversion Value Rules help advertisers accurately portray the value of conversions for Smart Bidding so they can optimize toward the most valuable conversions. This is the most sure-fire way to take control of Smart Bidding results. 

When you show Google which conversions hold the most significant value for your brand, ad spending will optimize according to what brings your brand the most revenue, profit, offline conversion value, or lifetime value– all in real-time. 

Conversion Value Rules also simplify reporting and optimization by eliminating the need to change tagging code.

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How do Conversion Value Rules work?

Here’s a quick rundown on the different elements of Conversion Value Rules and how they work:

Rule action

Every rule must have an action consisting of an operation and a value. This action shows Google how to adjust the conversion value for the rules that meet your conditions. You can use one of three values: 

  • Add: Adds a value greater than 0 to the original conversion value. 
  • Multiply: Multiplies the original conversion value by a specified value between 0.5 and 10. 
  • Set: Sets the conversion value to a specified value greater than 0. It can only be used under certain conditions.
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Creating a rule set

After making at least one Conversion Value Rule, you can create a Conversion Value Rule Set consisting of conversion action categories and Conversion Value Rules. 

A conversion action category is the list of conversion actions the rule set applies to. If this list is empty, the rule set applies to all categories. If it isn’t empty, then it must contain a single store visit or sale. 

You can only set the conversion action categories when creating the rule set. 

The SET action can only be used in one of the following scenarios: 

  1. The account is allow-listed, and the conversion action categories of the rule set are empty, 
  2. The conversion action categories of the rule set contain a single entry of store visit or store sale, the set's dimensions only contain an entry for no condition, and none of the condition fields of the rule are set. 

You can include each conversion value rule in just one conversion value rule set. If the Conversion Value Rules contain a resource name of a rule that is in the Conversion Value Rules of another rule set that is either enabled or paused, the operation will return a data constraint violation error.

Dimensions

The list of value rule set dimension values dictates which conditions the rules in the set can utilize. If dimensions contain geo-location and device, you can’t add rules with audience_condition. This list must contain 1 or 2 entries (it cannot be empty).

If the list contains an entry for NO_CONDITION, then:

  • NO_CONDITION must be the only entry on the list
  • The list of conversion action categories of the set can contain only a single entry of STORE_VISIT or STORE_SALE.
  • The list cannot contain any rule where audience, device, or geolocation conditions are set. 

The first entry in the list dictates which value populates for segments.conversion_value_rule_primary_dimension in reports.

Attachment_type

The attachment_type can be set to CUSTOMER to create a rule set applying to the entire account or CAMPAIGN to create a rule set that applies only to a specific campaign.

If the attachment_type is set to CAMPAIGN, then set the campaign to whatever resource name the rule set applies to. 

A rule set has an owner_customer and a status, but the status is read-only and will show PAUSED or ENABLED, depending on the status of its rules.

How are Rules Applied?

Only one rule per conversion: When more than one rule applies to an impression, Google chooses one rule based on either the most precise location match or the audience hierarchy below.

  • Customer match
  • Remarketing and similar audiences
  • Affinity and in-market audiences 
  • Detailed demographics

In the case of a tie, Google defers to MULTIPLY logic over the ADD rule. If the tie remains, Google chooses the highest adjustment. 

Additional rule attributes

  • Owner_customer: the resource name of the customer that owns the rule. 
  • Status: shows whether the rule is paused or enabled. 
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Reporting in your Google Ads Conversion Value Rules

All Conversion Value Rules output is automatically included in your campaign-level conversion value reporting. You can view the adjusted and unadjusted values via value rule adjustment segmentation. 

Removing Conversion Value Rules

Target ROAS and Maximize conversion value bidding account for active rules within your account to drive as much conversion as possible. When you remove a conversion value rule, Google will resume optimization for your current definition of value. This means you will have an obvious disparity between data pre and post-removal. 

ConversionValueRuleSets must have at least one PAUSED or ENABLED conversion value rule. Otherwise, the rule set will fail. You can remove a ConversionValueRuleSet without altering the status of the ConversionValueRules referenced by the set. Once the set is removed, search, and searchStream requests for that set resource will stop returning the removed set.

How to estimate conversion value

Below are three equations to help estimate conversion value: 

  • Short-term conversion value: To estimate short-term conversion value, multiply your average deal revenue by the profit margin, then multiply that by the percentage of leads that convert to a deal. 
  • Lifetime customer value: To estimate lifetime profit per customer, add the average deal revenue to the repeat business over a lifetime and multiply that sum by your profit margin. 
  • Word-of-mouth: Multiple the value per lead by the percent gain from word of mouth. 
  • Lifetime value per conversion considering word of mouth: Multiple the lifetime profit per customer by the percent of leads that convert and the gain from word of mouth. 
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Conversion Value Rule best practices

The conversion value rule strategy is pretty straightforward. Follow these best practices, and you’ll be on your way to a better ROAS:

Look at customer lifetime value and the entire conversion path 

To accurately identify conversion value, you have to examine the whole picture. Think about it– if a customer converts on a desktop but finds you on their mobile device, you won’t be able to assess the actual value of that impression unless you consider the full conversion path. 

Get accurate data

Wherever you pull the data used to calculate conversion value, ensure it is accurate. Informing Conversion Value Rules with inaccurate data will skew your ad spend and harm your ROAS. 

Be creative but conservative

Estimating conversion value can require a bit of creative guesswork, but it’s best to pair that creativity with a conservative mindset when you aren’t 100%. Consider taking a conservative approach to the riskier rules when choosing a rule action.

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Don’t be too general

When Conversion Value Rules are too general, they either underestimate the value or catch impressions that shouldn’t apply. The best strategy is a careful balance between getting too specific and generalizing value for a big chunk of your audience.

Final thoughts

Conversion Value Rules are designed to give advertisers more control over their Smart Bidding strategy by highlighting high ticket impressions. One of the most important tidbits to remember here is that creating Conversion Value Rules to skew Smart Bidding directions is a waste of time. Conversion Value Rules do not influence the direction Smart Bidding optimizes in– they just prioritize spending on the impressions that will have the best return. 

To get clearer insights for your conversion tracking not only on Google Ads but across all paid search, social, and display advertising…meet with a MarinOne expert today. 

Our analysis and attribution solutions will give you a far more clear picture of your marketings' holistic ROI (return on investment), MER (marketing efficiency ratio), and more.

Gordon Ferris

Marin Software
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